Gene targeting is a procedure in which an existing chromosomal segment is replaced with a corresponding segment that has been altered in the laboratory. This allows introduction of designed mutations into genes of model organisms for investigation of gene function. Application of gene targeting has been limited in many instances by its inherent inefficiency. A technique has been developed that allows high efficiency gene targeting in the organisms and cell types where it has been used. It is based on directed cleavage of the desired target with engineered enzymes called zinc finger nucleases (ZFNs). By manipulation of key residues in the zinc fingers, many different DNA sequences can be recognized and cleaved, and this cleavage activates the target for homologous recombination with the designed donor DNA. In experiments with whole fruit flies and cultured mammalian cells, frequencies of gene targeting up to 20% have been achieved. This proposal is to further explore the capabilities and enhance the utility of ZFN-induced gene targeting in flies and to extend the procedure to the nematode, Caenorhabditis elegans. Experiments in flies will test the dependence of targeting efficiency on the amount of homology and the types of alterations introduced;test a very promising approach for reducing the partial lethality that has been observed with some ZFNs;test the ability to target a wider range of sequences than has been achieved to date;and attempt to simplify the experimental procedure to make it readily accessible to all researchers. In nematodes, the procedure is at a much earlier stage of development. ZFN-induced cleavage of synthetic targets has been achieved in somatic cells. The proposal is to demonstrate cleavage of a pre-existing chromosomal locus;to test procedures that will allow germline expression of the ZFN;and to demonstrate germline cleavage and gene replacement in the worms. Development of effective gene targeting in these two popular model organisms will make the exploration of gene function more efficient. The lessons learned will be applicable to other systems, since the repair of DNA double-strand breaks by homologous recombination follows similar pathways in essentially all organisms. Gene targeting can be used to create animal models for human disease and, ultimately, for human gene therapy.